A connection between trends of different scales is usually the reason for natural movement. So, how and why exactly did the downward trend of Bitcoin’s price, that started on March 4th, happen?
During CoinTelegraph’s monthly analysis, we discovered that there was a good chance of a decline to previous levels, due to Bitcoin’s price being in a position which is usual for a change of cycles.
Earlier, we defined key weekly/medium-term levels of $420 and $445, which were responsible for one of the several potential scenarios for further development of the long-term trend. The Bitcoin price was fluctuating between them for a while, bouncing off the top of $445 and, without fortifying there, falling back to the bottom of $420.
Thus, there was no opportunity for a continuation of the medium-term upward trend. That was the first indicator of the future decline, which would support the recoil of the larger cycle.
Another significant confirmation was the fortification at the level of $420. It was that event which might have been responsible for the decline to the minimal point of $400.
A break through the level of $417, and fortification there, were the last two things which confirmed the downward trend. The $417 mark was the decision point, not only for the short-term, but also for the medium-term trend. We wrote about the time of choice on Friday, March 4th.
Ultimately, there was a possibility of a recoil within the larger trend. The change of cycles was the reason for that possibility. There was a break through the key resistance point of $420, which was protecting the medium-term upward trend. The price fortified there and formed a short-term downward trend, which resulted in a natural decline.
In our analysis, we said that the price would probably stop at $400, but BTC/USD has actually stopped a bit below that - at $390; that is because the level is always a certain range, just like $410-$420.
Possible scenarios for future development
Right now, the current trend is heading downward. The key level protecting the downward trend is $415-17, but there could be a bounce off it. This is the most profitable point for sellers, with the minimal target of $385.
However, when the BTC price reaches $417, provided it fortifies there, there could be a turnabout, and a return to $440-50.
If the downward movement continues, there is a possibility of a stop at the $380 resistance point, which is protecting the whole upward trend, which started in January.
This is where the market will decide if there will be a continued decline until $350, or a turn to growth.
The weekly resistance levels right now are $417 and $380. They will determine further development. The BTC price will either form a fluctuating movement between these levels, or start a new trend, after fortifying on either one of them.